View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. News
July 16, 2020

Nissan Motor axes output 30% – report

Nissan Motor reportedly is planning a 30% year on year cut in global vehicle production to the end of December 2020.

By Olly Wehring

Nissan Motor reportedly is planning a 30% year on year cut in global vehicle production to the end of December 2020.

Falling demand due to the COVID-19 pandemic has complicated its turnaround efforts, two sources told Reuters.

The automaker plans to produce around 2.6m vehicles between April and December, down from 3.7m during the same period last year, the news agency’s sources said.

Nissan made 4.6m cars in the financial year ended March.

Nissan, which has yet to announce a sales forecast for this financial year, declined to comment to Reuters on its production plans.

In June 2020, Nissan said it would make further production cuts in Japan due to COVID-19 impacts on global vehicle demand.

It said it would cut production at its three Japanese manufacturing facilities – Oppama, Tochigi and Kyushu – with new production suspensions planned on dates in June and July.

That followed similar production suspensions in May and earlier in June.

According to analysts at GlobalData, parent of just-auto.com, the June Nissan move reflected weak demand for the automaker’s products at home and in major export markets, and was unsurprising given how far demand had fallen due to the COVID-19 crisis.

GlobalData’s base COVID-19 light vehicle sales scenario forecast a fall of 17.2% on 2019 to 73.7m sales in 2020. The hit to the market would be greater than the 2007/8 financial crisis.

All major automakers in Japan had made significant production cuts in previous months, including Toyota, Nissan, Honda, Mazda, Suzuki, Daihatsu and Mitsubishi, in response to plunging global demand and measures introduced by the Japanese government to help prevent the local spread of the disease.

For loss-making Nissan there was the additional factor that it was firmly in turnaround mode and now focused on aligning manufacturing activity to profitable sales rather than pushing product to market amid expansive volume targets.

Reuters noted global automakers were struggling after factories were shuttered earlier this year to stem the spread of the pandemic.

Car dealerships were also closed in many countries, reducing vehicle sales in March through to the end of May, although the fall in sales slowed in June as economies started to reopen.

In the first two months of this 2020/21 financial year, Nissan made around 307,000 vehicles globally, down 62% from last year, according to monthly production figures cited by Reuters.

Nissan is planning for production to increase from 510,000 vehicles in the first quarter to around 930,000 in July-September, the Reuters sources said.

Second quarter output will be about 25% lower from a year ago, according to the news agency’s calculations.

Production is expected to increase to around 1.1m vehicles in October-December, roughly 8% lower on the year.

In July-September, Nissan’s output will be hit hardest at home, falling around 47% from last year, after the automaker said it would cut more shifts at its Japanese assembly plants.

Domestic output will recover slightly through to the end of December, the Reuters report said.

Topics in this article: ,
NEWSLETTER Sign up Tick the boxes of the newsletters you would like to receive. The top stories of the day delivered to you every weekday. A weekly roundup of the latest news and analysis, sent every Monday. The industry's most comprehensive news and information delivered every quarter.
I consent to GlobalData UK Limited collecting my details provided via this form in accordance with the Privacy Policy
SUBSCRIBED

THANK YOU

Thank you for subscribing to Just Auto